Consideration and Approval of Contract:  Purchase 17 gasoline powered trucks to replace diesel trucks through a City of Flagstaff Invitation for Bids, bid number 2015-66 (Approve contract with Tate's Auto Center in the amount of $625,820 for the purchase of 17 trucks).

The City has experienced engine and fuel system failures, increased maintenance costs, and excessive downtime with the light duty diesel trucks it currently owns. City of Flagstaff staff, as well as the Fleet Committee, recommend replacement of these 17 light duty diesel trucks with gasoline powered trucks.

 The following divisions have budgeted appropriation in the 2016 budget for these truck replacements:

• Utility Division has budgeted $160,000 in account (202-08-303-1050-0-4401) and $120,000 in account  (203-08-313-1130-0-4401) to replace six (6) trucks.
• Solid Waste Division budgeted $77,320 in account (211-06-166-0645-0-4401) to replace one (1) truck.
• The Fleet Catastrophic fund (001-06-154-0557-3-4401) with a FY2016 budget of $1,972,406 will fund the Parks Division ten (10) trucks.  Seven of the ten trucks were originally funded with BBB funds and these BBB funds will provide funding for the purchases via a transfer out to the General Fund.

None

Option 1) Award the contract to Tate's Auto Center as the lowest responsive, responsible bidder.
Option 2) Continue to operate the trucks and absorb the repair costs, downtime and decrease in customer service.

In 2008, the City of Flagstaff  purchased diesel powered trucks ¾ ton and larger. This was to take advantage of the Bio-Diesel program and the rebates it provided. As diesel engine emission standards became more stringent and the technology progressed, high idle applications suffered. This ultimately reduced the benefits and efficiencies for in-town diesel light-duty applications. As a result, the City of Flagstaff has experienced high down time due to engine and fuel system failures and the related repair costs.

1. Replacing these 17 trucks at 50% life cycle will be economically beneficial; engine replacements average $20,000, and so far six (6) engines have failed.  Now that the trucks are out of warranty, the respective Divisions will have the budgetary burden to repair and maintain these trucks.
2. The power train warranties have expired. Despite our efforts to seek remedy, there have been no repairs or modifications offered by the vehicle manufacturer that will provide a long term solution(s) in their current application.
3. The proposed 17 new gasoline powered trucks will have a 5-year, 100,000 mile power train warranty. These trucks will have a lower maintenance cost and will save operational budgets as well as ensure more productive trucks and personnel.
4. There will be a cost savings due to the new trucks' 5 year, 100,000 mile warranty, and Fleet will have 17 new light duty trucks at the beginning of their 15 year life cycle

To properly operate these trucks with the emission control devices, they need to be driven at highway speeds to clear their exhaust filters. This needs to be done weekly for over ½ hour. In addition the manufacturer now recommends more frequent oil changes to remove the excess fuel that accumulates in the engine crankcase. This in turn increases maintenance costs. It is still unknown how much this will reduce the failure rate and emission repairs on these trucks. Following the manufacturer's recommendations, the City of Flagstaff has still experienced six engine failures out of 17 trucks, a failure rate of 35%.

Maintain a high level of service.

Inform

Option 1. Award the contract to Tate's Auto Center as the lowest responsible, responsive bidder. 
Option 2. Continue to operate the trucks and absorb the repair costs, downtime and decrease in customer service.